How are Business Schools Injecting Politics Education into their MBA Programs?

From the election to the US presidency of Donald Trump to the impending departure of the UK from the European Union, there is a very high degree of political risk facing business today. Geopolitics and mass economic change, as a result of technological advancement, mean managers must increasingly make decisions whilst shrouded by ambiguity.

Business schools have long faced criticism that they focus too much on core content like finance and not enough on the implications of political change. But some are incorporating the topic more widely into the MBA curriculum, in response to growing student demand.

Mike Rosenberg, at IESE Business School in Spain, which faces its own geopolitical challenge in the Catalan independence crisis, says the growth is a reflection of the growing instability in the world, since the end of the Cold War. “With that uncertainty comes interest. Our students come from many countries, so they need to figure out what part of the world to bet their career on.”

He began teaching a geopolitics course at IESE two years ago but the subject has been on the curriculum for the past eight years. “I want our students to have an even deeper understanding of globalization,” Rosenberg says.

The course explores the geopolitics of regions such as Latin America, and examines case studies of companies who have faced challenges. “The whole idea is to get students to understand that business strategy has to be unique to the nature of the place you operate in,” says Rosenberg.

Understanding geopolitical risk is beneficial to a wide variety of management careers, particularly supply chain management, and will make you more employable. “Many students will work at multinational companies which are affected by actions in any countries in which they operate,” says Kyle Handley, assistant professor with University of Michigan’s Ross School of Business.

“If students can understand how those issues affect their business, they will be better off and can make better decisions,” he says. “A lot of companies will appreciate that when looking for newly minted MBAs for jobs.”

An economist, Handley teaches geopolitics to MBAs at Michigan Ross, examining issues such as investing under uncertainty. “We want them to be able to deal with ambiguity, because it’s difficult to hedge political or policy risk; I can’t buy a forward contract on whether the tariff on the goods I’m shipping to China will go up,” Handley says. “So, it’s important for students to learn how to think about these decisions when traditional financial tools are not available.”

Rosenberg believes there is a lack of senior executives who can do that. “These people make big decisions on investments, markets and global strategy based on the assumption that everything will be fine tomorrow, as it was yesterday, but that is not good enough,” he says. “I hope MBAs who learn this, as they move up in the ranks in companies, will ask the harder questions.”

While geopolitics is increasingly being brought onto the business school syllabus, schools face challenges in teaching such a dynamic and fast-changing subject. “The world moves rapidly and things are uncertain. If I teach the students about Brexit today, that course will be out of date next year, if not sooner. Our content has to change all the time,” says Michael Kitson, at University of Cambridge’s Judge Business School.

The course he teaches goes beyond geopolitics to consider the changing global business landscape, such as the impact of artificial intelligence, climate change and social inequality on the global economy. “Students study many conventional courses but I focus on understanding the bigger picture — why is there a rise of protectionism and concerns about immigration; how will Brexit impact Europe’s economic growth?”

Another challenge is guiding student debate on what can be very sensitive issues, such as the Israeli–Palestinian conflict. “We have students from both Palestine and Israel. But we have to separate emotion from analysis and find a way through it. Typically, our students park their emotion at the door and get into the spirit of things and many become fast friends despite their differences,” says IESE’s Rosenberg.

With global risk seemingly growing, more schools will likely seek to place a greater emphasis on geopolitics in their teaching, which can only be a good thing for their students.